Indonesia overtakes Japan as virus upends aviation pecking order

JAKARTA/TOKYO: Indonesia has overtaken Japan to become the world’s third-biggest aviation market as airlines continue to slash passenger capacity because of the Covid-19 (coronavirus) pandemic, according to OAG Aviation Worldwide.

The country’s scheduled capacity is now 2.1 million seats, down 7.8% from last week, but just ahead of Japan’s after a drop of nearly 15% there. Chinese capacity rose 7.2% to 8.7 million seats, making it the biggest market. The US has fallen nearly 27% to 8.2 million this week, data from OAG show.

A resilient domestic market has helped shield Indonesia to a degree, though capacity is still down 33% from the Jan 20 week and virus containment efforts are being stepped up amid warnings that infections could climb to 95,000 by the end of next month from about 4,500 now.

President Joko Widodo last week banned government employees from travelling during Ramadan and urged the public to avoid taking trips at what is typically a peak travel time in the world’s fourth-most populous nation.

"Domestic markets have fared much better than international sectors,” OAG analyst John Grant wrote in his weekly blog, noting that domestic capacity accounts for 85% of all seats globally.

China helped drive a 1% weekly recovery in Northeast Asia with 600,000 additional domestic seats, according to OAG.

"Increasing demand and the seasonal May holidays are expected to see further recovery in this particular market,” Grant said. The "Big Three” of Air China Ltd, China Southern Airlines Co and China Eastern Airlines Corp all reported increases in week-on-week capacity, he said.

Many regional markets are operating at less than 15% of historic capacity.

On Jan 20, 790 airlines planned to operate scheduled services compared with 590 this week, a drop of 25%, Grant said. Some carriers that usually would operate over 1 million seats a week at this time of year aren’t flying at all, such as Ryanair Holdings Plc, EasyJet Plc, AirAsia BHD and Turkish Airlines, he added.

"The middle to end of May appears the latest thinking in terms of bringing back some capacity but the situation remains extremely fluid,” Grant said.

"Next week’s data will take us below the 30 million weekly seats mark from which point we look forward to seeing capacity growth return.”

OAG previously forecast that cuts could bottom nearer 40 million seats. - Bloomberg
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